If You Don't Upgrade Your HR Tech, Your Employees Might Leave

By
PC Mag ME TeamAug. 25, 2016, 10:30 a.m.

It's the dawn of HR 2.0. Failing to upgrade could cost you your people.

As an employer, you might think you're saving money by sticking with older human resources (HR) software, but you'd be wrong. Access to new technology plays a role in employees' satisfaction with their jobs and employers. The older the tech, the more likely people are going to feel it's inadequate and use it as a reason to look for work elsewhere, according to a recent survey of corporate IT practices.

The survey of 700 IT managers and 1,400 employees in five countries conducted for Sungard Availability Services wasn't specifically about HR tech but it could have been. Because the HR software available for managing your workforce is changing in a big way and, if you're not paying attention, you could end up losing people to more forward-thinking competitors.

Of the US-based employees polled in the survey, 32 percent say they have left an employer that didn't allow for digital work practices. Plus, 45 percent believe their current employer is behind competitors in adopting the latest and greatest digital tools and technologies. The vast majority (83 percent) of US-based employees surveyed feel that having access to the latest digital tools is important because it makes their jobs easier, and makes them more productive and better at what they do.

Hanging onto employees probably isn't the first thing you think about when you're buying a new HR management platform, applicant tracking systems (ATS), or employee scheduling and shift planning software package. There are higher priorities, such as figuring out what product will best solve your problems, fit your budget, and make your HR team more productive. It's worth factoring in new tech's effect on employees, though, because it's easy to lose employees. And it's time-consuming and expensive to replace them, especially if you operate in an industry that's begging for skilled workers.

Hello HR 2.0

If you've shopped for HR tech recently, read my past columns, or checked out my reviews of cloud-based HR tech, then you know we're in the middle of a major transition to a second-generation of cloud-based HR tech—or what industry watchers have started calling "HR 2.0."

New cloud-based platforms are superior in many ways to the first generation of cloud-based HR tech, even though that software is only a few years old. HR 2.0 tech has user interfaces (UIs) that look like Facebook. They're easy to learn, use, and customize. They're streamlined; HR staff and employees log into the same system but only see the functions that relate to them. They're mobile-friendly. They include the analytics companies want in order to more efficiently plan, manage, and motivate people. They have open application programming interfaces (APIs) that make it easier to integrate with other HR and business software.

The more happy customers of HR 2.0 startups such as BambooHR, Deputy, Humanity, Namely, SmartRecruiters, and Zenefits, are out there preaching the gospel of HR 2.0, the bigger the user base is going to get, and the more influence it will have over HR departments and ultimately employees. And companies that don't keep up are going to look stodgy in comparison.

Look at what's happening to Workday, the $1.1 billion HR tech company that took the industry by storm earlier this decade by offering cloud-based platform for enterprise-level organizations (at a time when competitors such as Oracle and SAP still depended mainly on sales of on-premises software). But that was then. Just this week, Workday's stock dropped 3 percent after a Wall Street analyst cut his rating after determining the company wasn't signing up new customers as quickly as forecasted and was losing some existing users of its cloud-based payroll platform, according to Barron's. My hunch is that Workday's been unable to attract as many midsize companies as predicted because those organizations can sign up with HR 2.0 platforms that cost a lot less money and are easier for employees to use.

Presenting a Fresh Image to Prospective Employees

Forward-thinking workplaces are also upgrading to HR 2.0 recruiting software to project a modern, fresh image to the people they hope will come work for them. These are "your future employees, the talent you're trying to attract; it's their first interaction with you," sad Jerome Ternynck, CEO of SmartRecruiters. "If you send them an application form designed 15 years ago that doesn't work on your mobile, what message are you sending? 'Hi, I'm an outdated enterprise company, don't come to work for me.'"

If you're still not convinced HR 2.0 is worth it, consider this: According to the aforementioned Sungard survey, 42 percent of employees ages 25 to 34 would leave their current organizations if they were offered a role at a more digitally progressive organization. Those are Millennials, the generation that accounts for the biggest chunk of the US workforce, and the very job seekers over which recruiters drool. Do you really want to drive them off with time and attendance software that doesn't let them clock in from their phones? Or with weekly schedules you still post on the break-room bulletin board?

Millennials aren't the only employees who prefer to be associated with tech-savvy workplaces. According to the survey, 42 percent of employees ages 35 to 44 would quit their job for a new position at a more digitally progressive organization as well. Even among the oldest workers, ages 65 and up, close to a third (32 percent) would leave for a gig at a more technologically forward-thinking business, too.

Where to Find HR 2.0If you're ready to upgrade, then how do you find HR 2.0 options? Here are four places to look:

1. PCMag Business Software Index - This directory includes more than 30 HR software and management products in multiple categories, and is sortable by Editors' rating, price, deployment (e.g., cloud-based, on-premises, etc.), and user licenses.

2. Michelle Rafter's HR Tech Twitter List - I aggregated Twitter handles for approximately 100 HR tech providers across a range of functions, including recruiting, core HR management, applicant tracking, performance management, employee engagement, and rewards and recognitions. It's by no means all-inclusive; if you have suggestions for other vendors to include, let me know.

3. "The HR Software Market Reinvents Itself" - In this Forbes.com blog post, longtime workplace industry analyst Josh Bersin, Principal at Bersin by Deloitte, recounts the evolution of HR tech from on-premises to cloud to HR 2.0. Check out the list at the end of "HR Tech Vendors in Multiple Niches," including employee engagement and feedback, workplace collaboration, and training and learning.

4. "HR 2.0 is the Poster Child for the Next Wave of SaaS Innovation" - Skip Next World Capital Principal Tarun Kalra's investor-speak explanation of why HR tech is propelling the Software-as-a-Service (SaaS) boom, and head straight to his Pinterest-ready chart of HR tech innovators in recruiting, management, and core HR.